How Long Can a Lawyer Hold a Settlement Check?

After navigating the lengthy and complex legal process, receiving a settlement check can be a moment of relief and joy. Essentially, the attorney representing you will receive the settlement check on your behalf and help facilitate payment of your financial compensation. This is to ensure that all legal and financial obligations are met before disbursing the funds.

But what happens when your settlement check lands in your lawyer’s hands? How long can they hold onto it? In this article, we will explore what a settlement check is, why lawyers might hold onto it, and how long they can do so. In addition, we will enlighten you about the next steps you can take if your lawyer is withholding your settlement check for too long.

What Is A Settlement Check?

A settlement check can be described as a payment (or financial compensation) that you receive after a legal dispute is resolved in your favor. Such resolutions are often reached either through a settlement negotiation or a court decision. This check typically represents the agreed-upon amount or compensation for damages, injuries, accident-related expenses, or other losses you’ve suffered. 

Furthermore, the settlement process often involves negotiations between the parties involved. Once an agreement is reached, the defendant or their insurance carrier will issue the settlement check to your lawyer. However, settlement checks can vary greatly in amount, from a few hundred dollars to millions, depending on the nature and severity of the case.

Why Do Lawyers Hold Settlement Checks?

Lawyers often hold settlement checks for several important reasons. These include:

Legal and ethical obligations: They must ensure all parties have fulfilled the settlement agreement terms.

Financial obligations: They must ensure that all financial obligations are met before disbursing the funds.

Lien resolution: Your lawyer may need to pay off any liens against your settlement, such as medical bills or unpaid taxes.

Fee deduction: They’ll deduct their agreed-upon fees, court costs, and other case-related expenses.

Fund clearance: They wait for the check to clear in their trust account to avoid any payment issues.

Dispute resolution: In cases where there are disagreement over fees or expenses, they may hold the check until it is resolved.

This temporary holding period, while sometimes frustrating, is often in your best interest. This is to help ensure a smooth payment process and avoid potential issues.

How Long Can A Lawyer Hold A Settlement Check?

The duration a lawyer can hold your settlement check varies depending on several factors, but it’s generally not indefinite. Most state bar associations have rules that require lawyers to promptly notify clients when they receive funds and to disburse those funds in a timely manner. Typically, this process takes about 1-3 weeks. However, complex cases with multiple liens or disputes might take longer. 

Moreover, some states have specific timeframes; for instance, California has a 30-day rule for medical liens. The check must also clear at the bank, which can take several days. It’s important to note that while lawyers can hold checks for legitimate reasons, they cannot indefinitely withhold your funds without proper justification.

What to Do If Your Lawyer Is Withholding Your Settlement Check

If your lawyer is withholding your settlement check for an extended period, you should take the following steps:

Communicate Openly With Your Lawyer

Start by having an honest conversation with your attorney. Ask for a detailed explanation or reason for the delay and a timeline for disbursement. Often, clear communication can resolve misunderstandings, provide clarity on delays, and help you achieve peace of mind.

Request a Written Explanation

If verbal communication doesn’t suffice, request a written explanation of why your check is being held and what steps are being taken to resolve any issues. This creates a paper trail and can help clarify complex situations.

Request a Timeline

Also, if your lawyer is holding the check for valid reasons, you can request a clear timeline for when you can are likely to receive your funds. This can help you manage your expectations and plan accordingly.

Review Your Fee Agreement

Alternatively, you can revisit the agreement you signed with your lawyer at the beginning of your case. This document should outline the terms and process for handling and disbursing settlement funds. It can also provide you with clear insight into expected timelines.

Consider Mediation

If you’re at an impasse with your lawyer, consider using a neutral third party to mediate the dispute. Many state bar associations offer mediation services for attorney-client conflicts.

File a Complaint 

However, if you believe your lawyer is acting unethically or violating rules of professional conduct, you can file a complaint with your state bar association. They can investigate the matter and take appropriate action if they find any wrongdoing.

Seek a Second Legal Opinion

As a last resort, consult another attorney about your situation or take legal action. They can provide an objective view of whether your current lawyer’s actions are reasonable and advise you on potential next steps. However, this should only be a last resort after exhausting all other options.

Conclusion

While it’s natural to feel anxious about receiving your settlement check, understanding the process can help ease your concerns. Lawyers have valid reasons to temporarily hold funds, usually to protect your interests and fulfill legal and financial obligations. However, this should not be an indefinite process. By knowing your rights and the appropriate steps to take if you’re concerned, you can navigate this final phase of your legal journey with confidence. If you encounter issues, don’t hesitate to seek additional advice or take appropriate action to protect your interests and ultimately recover your funds.

Need Affordable Lawsuit Loans? Call Us Today!

If you have an ongoing lawsuit and you are facing financial instability, you may apply for our non-recourse settlement funding. Reach out to us at High Rise Financial today for a simple consultation. Our trusted financial specialists can help determine your eligibility and guide you through every phase of the lawsuit loan application.